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DuPont: Corporate Rap Sheet

DuPont

By Philip Mattera

Formally known as E.I. du Pont de Nemours and Company, DuPont was for its first century the dominant U.S. producer of explosives (earning it the appellation Merchant of Death), and then in the 1920s began to cultivate a more benign image with its introduction of nylon as well as other staples of modern life such as Lucite, Freon, Teflon, Lycra and Kevlar. For years the company’s slogan was “better living through chemistry.”

Yet that chemistry also brought with it serious environmental hazards such as depletion of the atmosphere’s ozone layer; fungicides that killed plants as well as fungi; carcinogenic chemicals related to the production of non-stick coatings; and serious pollution problems at many of the company’s plants, including those in Delaware, a state that DuPont long controlled as a virtual fiefdom. DuPont also has an abysmal labor record, both in its decades of resistance to unionization drives and in allowing conditions in its workplaces that resulted in elevated levels of injury and disease.

In 2015 DuPont spun off its specialty chemicals business, which had been the source of many of the company's environmental problems, into a new company called Chemours.

In late 2015 DuPont and its long-time competitor Dow Chemical announced plans to merge and then split into three companies. The merger took effect in 2018.

Antitrust

In the early 20th Century, DuPont came to assume such a commanding position in the explosives market that the federal government began antitrust proceedings against the company in 1907. Five years later DuPont and the Gunpowder Trade Association were deemed an illegal gunpowder monopoly, and the company was compelled to sell off some of its holdings, which were turned into two new companies: Atlas Powder and Hercules Powder. (Some time later, in 1942, DuPont, Atlas, Hercules and several other companies pleaded no contest to criminal antitrust violations). Yet DuPont was allowed to maintain a complete monopoly in the sale of smokeless powder.

After prospering during the First World War—DuPont produced some 40 percent of all explosives shot from Allied cannons—the company resumed its expansion and diversification. DuPont went on such a spending spree in the 1920s and 1930s that it virtually turned into a holding company. Among the purchases were major stakes in National Ammonia, United States Rubber, Remington Arms, and U.S. Steel (the latter being sold after the Federal Trade Commission began an investigation). DuPont also formed cartels and joint ventures throughout Europe, South America, and other parts of the world.

In 1949 DuPont the company and the du Pont family faced an antitrust suit brought by the Justice Department in connection with the controlling interest in General Motors they had held for three decades.

The government charged that General Motors was simply too large an economic force to be controlled by one family or financial group. DuPont used an elaborate public relations campaign to present an innocent image of itself and also managed to win over the judge in a juryless trial.

In 1955, less than a year after the favorable verdict, DuPont took the brazen step of announcing that it would increase its holdings in GM by $75 million. This time the Delaware dynasty had gone too far. Even within the business community there was dismay over the move, and in 1957 the Supreme Court overturned the judge's ruling in the antitrust case and declared that DuPont's control of GM was indeed in violation of law. Four years later, the high court ordered DuPont to sell its holdings in GM over the course of ten years. Because of the effect such a sale would have on the stock market, even spread out over a decade, the company decided to distribute its 63 million GM shares to DuPont stockholders. The process was completed in 1965.

Environment

The business of DuPont was dangerous from the start. The black powder that the company produced during its early decades was extremely volatile, and fatal explosions were a frequent occurrence for its workforce. So perilous was the powder that the company had difficulty getting ships and trains to transport it to customers. For a long time the most common means of conveyance was the mule train, though that became controversial after three DuPont wagons loaded with 450 kegs of powder exploded in 1854 while traveling through the middle of Wilmington, Delaware, killing the drivers, the mules and several bystanders while also digging a large crater in the street. Many towns consequently passed ordinances barring powder wagons from their thoroughfares.

In the mid-1970s DuPont was put on the defensive by growing evidence that Freon, its product used in aerosol cans and in refrigerants, was contributing to the destruction of the earth's ozone layer, in turn creating an increased danger of skin cancer from the sun's rays. The company found its own experts who downplayed the danger of chlorofluorocarbons (CFCs) like Freon, while DuPont officials warned that curtailing production could result in the loss of several hundred thousand jobs. It was not until the late 1980s, after more than a decade of resistance, that the company conceded CFCs might be a problem. In 1988 DuPont announced with great fanfare that it would phase out production, but environmental groups charged the company with moving too slowly and warned that some of the substitutes DuPont was introducing for CFCs were also harmful to the ozone layer. The Wilmington (Delaware) News Journal reported in 1991 that DuPont had used human subjects during 1960s experiments on the use of Freon for dry-cleaning women's hair.

In 1988 DuPont’s Conoco subsidiary agreed to pay a $250,000 civil penalty for violating the Clean Air Act at an Oklahoma oil refinery and also agreed to spend more than $1.5 million on pollution controls at the facility.

In 1989 evidence emerged that the Savannah River nuclear weapons plant, which DuPont had built and operated for the federal government since 1951, had serious structural flaws and safety problems that the company failed to report. Numerous accidents at the South Carolina plant, which made plutonium and the tritium gas needed in nuclear warheads, were also kept secret. The U.S. Energy Department tried to exonerate company by saying that the problems had been reported and it was the government that kept them secret. A number of former officials, however, said they were never informed. The facility was turned over to Westinghouse in 1989.

In the early 1990s DuPont was hit with hundreds of lawsuits than after a wave of reports that its fungicide Benlate was causing widespread plant damage. The company had to take the product off the market and initially paid more than $500 million in compensation. It then decided to fight the remaining suits. During the trials evidence came to light that DuPont had known about the problem with Benlate for years and kept quiet about it. In 1995 a federal judge fined DuPont $115 million for concealing evidence, though the penalty was overturned on appeal.

The company has also had a mixed record regarding other hazardous materials. In the late 1980s it was responsible for more toxic releases than any other manufacturing company.

In 1991 DuPont was fined $1.9 million for dumping corrosive acids and toxic solvents at a plant in New Jersey.

In 1993 the EPA charged DuPont with Toxic Substances Control Act violations for failing to include test data in a pre-manufacture notice submitted in 1984; the agency proposed a fine of $158,375.

In 1998 DuPont was fined $1.9 million by the EPA for misbranding and mislabeling pesticides.

In 2000 DuPont agreed to pay $1.5 million to settle alleged EPA violations related to a 1995 release of more than 23,000 gallons of a sulfuric acid solution into the air at the company’s plant in Wurtland, Kentucky.

In 2002 the EPA announced that it had settled charges brought against Pioneer Hi-Bred, which had been acquired by DuPont three years earlier, concerning the mishandling in Hawaii of genetically modified corn grown for seed.

In 2003 DuPont paid $550,000 to settle charges that it violated the Clean Air Act with a chemical release at a fluoroproducts plant in Kentucky.

DuPont was a pioneer in developing and continues to be a major producer of perfluorinated compounds (PFCs), which over the past decade have come to be regarded as one of the most highly toxic, extraordinarily persistent and likely carcinogenic group of chemicals that work their way into the bloodstream of humans and wildlife. DuPont’s highest profile PFC-based product is Teflon, best known for its use in non-stick cookware.

In 2004 the Environmental Protection Agency charged that for two decades DuPont failed to report signs of health and environmental problems linked to perfluorooctanoic acid (or PFOA), the PFC used in making Teflon. Residents living near the plant in West Virginia where DuPont produced PFOA sued the company, which agreed to pay about $100 million to settle the case. DuPont also paid $16.5 million to settle the EPA charges and later agreed to gradually phase out PFOA; the Justice Department decided not to bring criminal charges. The litigation over PFOA did not end. In 2011 DuPont reached a preliminary $8.3 million settlement with a group of residents living near a company plant in New Jersey.

In 2005 the EPA and the Justice Department announced that DuPont had agreed to pay more than $2.3 million to settle Clean Air Act charges related to leaks of ozone-depleting refrigerants at a plant in Tennessee.

In 2006 the federal government and the Delaware Department of Natural Resources reached an agreement with DuPont and Ciba under which the companies agreed to pay more than $1.6 million to clean up the DuPont Newport Superfund Site, which contaminated wetlands in and around the Christina River ecosystem.

In 2007 the EPA and the Justice Department announced that they had settled Clean Air Act charges against DuPont with an agreement under which the company would spend at least $66 million on emissions control equipment at four sulfuric acid production plants in Louisiana, Virginia, Ohio and Kentucky. DuPont and Lucite International later agreed to pay $2 million to settle allegations of violations at another sulfuric acid plant in West Virginia owned by Lucite but run by DuPont.

In 2009 the EPA revealed that after Koch Industries acquired a dozen synthetic fiber plants from DuPont, the company reported to the EPA that the facilities had extensive environmental compliance problems. An audit found more than 600 violations.

In 2010 DuPont agreed to pay $70 million to plaintiffs to settle a class-action suit concerning decades of pollution by the company’s former zinc smelter in West Virginia. DuPont also agreed to fund a 30-year medical testing program that was estimated to cost another $80 million. The settlement put an end to DuPont’s appeal of a $400 million jury verdict three years earlier.

Also in 2010 DuPont agreed to pay a penalty of $3.3 million to the EPA to resolve 57 Toxic Substances Control Act violations involving the failure to immediately notify the EPA of research results showing substantial risks found during the testing of chemicals for possible use as surface protection.

In 2011 the EPA ordered DuPont to halt immediately the sale or distribution of the herbicide Imprelis that had been found to be harming a large number of trees. The company also faced compensation claims from users of the herbicide running into the hundreds of millions of dollars.

Also in 2011, the EPA, the Justice Department and state agencies in Delaware entered into a consent decree with DuPont under which the company agreed to pay a penalty of $500,000 for numerous water quality violations at its Edge Moor plant. Shortly thereafter, DuPont agreed to pay a $250,000 civil penalty to settle alleged violations of hazardous wastewater regulations at the company’s wastewater treatment plant in Deepwater, New Jersey.

In 2014 the EPA announced that DuPont would pay a $1.275 million penalty and take corrective actions to settle charges relating to the toxic releases at the Belle facility.

A few weeks later, the EPA announced that DuPont would pay $1.853 million to settle allegations that it failed to submit reports about potential adverse effects of is Imprelis herbicide and that the company sold the product with labeling that did not ensure its safe use.

Occupational Safety & Health

Workplace safety and health has long been a matter of contention at DuPont. In the 1920s there was a controversy over the deaths of eight DuPont workers and the poisoning of several hundred others in connection with the production of tetraethyl lead for gasoline. Similar conditions arose at a plant of Standard Oil of New Jersey (now Exxon), which was producing the gasoline with the tetraethyl lead in a joint venture, called Ethyl Gasoline Corp., with General Motors, then controlled by DuPont.

During the early 1970s, evidence began to emerge of high levels of bladder cancer among DuPont production workers, especially at the Chambers Works in New Jersey. Since at least the 1930s there had been evidence linking beta-nephthylamine (BNA), a chemical used in dye bases, to cancer. Yet the company went on producing BNA at Chambers until 1955, and after it was dropped DuPont went on making benzidine, another carcinogen, for ten more years.

In more recent times, DuPont has claimed to be a pioneer of enlightened workplace safety and health practices, but it has run afoul of federal regulations and the courts. In 1987 a New Jersey Superior Court jury found that DuPont officials and company doctors deliberately concealed medical records that showed six veteran maintenance workers had asbestos-related diseases linked to their jobs. Also in 1987, the company agreed to pay fines totaling $11,100 as part of a settlement of OSHA charges relating to record-keeping at plants in Dallas and Niagara Falls, New York.

DuPont was also at the center of a controversy regarding the practice of genetic screening. A series of articles by Richard Severo in the New York Times in 1980 revealed that many major companies in the chemical and related industries had begun testing employees to determine which ones might have a genetic makeup that made them more susceptible to toxics and carcinogens they might be exposed to in the workplace. Among these DuPont was cited as the only firm that gave blood tests to black job applicants to determine which ones were carriers of the trait for sickle-cell anemia.

In 1995 Conoco agreed to pay $1.6 million to settle OSHA charges related to an explosion and fire the year before that killed a worker at a refinery in Louisiana.

In 1999 OSHA announced that DuPont would pay $70,000 to settle charges that it failed to record more than 100 injury and illness cases at its plant in Seaford, Delaware.

In 2010 OSHA criticized DuPont for exposing employees to hazardous chemicals at its plant in Belle, West Virginia, where a worker had died after a ruptured hose released a large quantity of phosgene gas. The following year, OSHA cited DuPont for dangerous conditions after a contract welder was killed when sparks set off an explosion in a slurry tank at a plant in Buffalo, New York. In 2012 the U.S. Chemical Safety and Hazard Investigation Board added its criticism of the company in connection with the Buffalo accident.

In November 2014 a leak of methyl mercaptan (used in the production of pesticides) at a DuPont plant in LaPorte, Texas caused the death of four workers. In July 2015 OSHA proposed fines of $273,000 in connection with the accident and put DuPont on its severe violator list.

Labor

Throughout much of its long history, DuPont was driven by a strong anti-union animus. The company successfully warded off independent organizing among its employees through a combination of intimidation (extensive networks of spies were used in plants to identify and eliminate "malcontents") and paternalism (the company was a leader in the introduction of fringe benefits such as employer-paid pension plans).

Union organizing efforts—including some by the United Mine Workers' old District 50 in the late 1930s—were crushed mercilessly at DuPont. Once the labor movement made collective bargaining inevitable, DuPont responded by fostering the creation of company-dominated employee associations. While these evolved into organizations that were technically unions, they operated at an extremely low level of militancy. The 1973 Nader study of DuPont (The Company State by James Phelan and Robert Pozen) quoted an official of one of these unions as saying: "We're not company dominated. We're so weak the company doesn't have to dominate us." One major union, the International Chemical Workers, did manage to organize a few DuPont facilities.

The company fought hard to keep these unions isolated from one another, even though they joined together in the Federation of Independent Unions-DuPont Systems. When the local at an electrochemical plant in Niagara Falls, New York, went on strike in 1970 no other locals staged any job actions in support, even though DuPont brought in employees from other plants to serve as strikebreakers. The company organized pro-management employees to bring about a change in the leadership of the Niagara Falls local, and after six months the strike ended ignominiously.

Some of the unions joined forces with Nader in the 1970s to challenge the company's pension policies and other practices. Many employees were sympathetic to the organizing efforts of the United Steelworkers during the 1970s. Yet DuPont continued to do things its own way. When elections were held at 14 plants in 1981 the Steelworkers were defeated—due, in no small part to the firing of activists and other unfair labor practices by DuPont—and the company continued to take a tough line with the independent unions.

DuPont refused to negotiate with the unions on legally mandatory subjects of bargaining and also strongly resisted any forms of coordination by the different locals. When the union at Old Hickory, Tennessee in the early 1980s demanded data on wage rates at DuPont's other textile plants, the company refused, even after the National Labor Relations Board ordered it to supply the information. And when the members of the Ampthill Rayon Workers union at the Spruance plant in Richmond, Virginia voted in 1985 to affiliate with the United Steelworkers, the company insisted on negotiating only with the independent union. DuPont also resisted recognizing the International Brotherhood of DuPont Workers, formed in 1981. It did, however, inherit some contracts with the Oil, Chemical and Atomic Workers (OCAW) after taking over Conoco.

In 1988 the company introduced an unusual incentive plan for all employees in its fibers business. The scheme, designed to raise productivity and foster a team environment, tied the pay of everyone from hourly workers to the group vice president to the unit's profitability. The firm's unionized workers, for whom the plan was voluntary, had mixed feelings about it; non-union workers had no choice but to participate. In late 1990 the plan was dropped amid frustration among employees at the loss of part of their raises because of industry-wide conditions that were depressing profitability in the fibers business. A year later the company introduced a stock option plan for most of its employees.

In 1993 the NLRB told DuPont to cease using employee-management committees to discuss safety issues and other working conditions, ordering the company to negotiate with unions instead. This prompted OCAW to step up its campaign to affiliate the remaining independent DuPont unions, an effort that intensified after OCAW merged with the Paperworkers union to form PACE (which later merged into the Steelworkers).

In 2006 DuPont moved further away from its paternalistic approach with the announcement that it would make severe reductions in its pension benefits in the course of switching from traditional defined benefit plans to defined-contribution ones. The company refused to arbitrate this change with its unions, resulting in a court battle that the company eventually lost in the federal court of appeals.

A 2006 meeting of DuPont unions from eight countries held under the auspices of the ICEM trade union federation issued a resolution criticizing the company for, among other things, "support of union-busting in the United States.”

Human Rights

Beginning in the late 1980s, DuPont sought to build a factory in Goa, India to produce a form of synthetic nylon used in tires, but it faced strong opposition from local activists concerned about the company’s checkered environmental record. By the mid-1990s there were clashes between police and protestors at the plant site, and in one case police opened fire on a demonstration, resulting in one death and numerous injuries. DuPont and its local partner decided to give up on Goa and sought to build the plant in Tamil Nadu, but faced opposition there as well. Nonetheless, the plant was built.

Discrimination

In 2005 a federal judge upheld a jury verdict that found DuPont liable for maliciously and intentionally discriminating against an employee with a disability, who was awarded $1.3 million in damages (later reduced to $591,000). The case had been brought by the U.S. Equal Employment Opportunity Commission. DuPont unsuccessfully appealed.

Blood Relations: The Rise and Fall of the du Ponts of Delaware by Leonard Mosley (1980).

Du Pont and the International Chemical Industry by Graham D. Taylor and Patricia E. Sudnik (1984).

Du Pont Dynasty by Gerard Colby (1984). This is a revised and updated version of a book called Du Pont: Behind the Nylon Curtain that the author published under the name Gerard Colby Zilg in 1974. Promotion of the book was abruptly ended after du Pont family members complained to the publisher, Prentice-Hall.

Du Pont Fiddles While the World Burns: Industry Inaction on Ozone Depletion by U.S. Public Interest Research Group (1989).

DuPont and Greenwash: An Examination of the Limits to DuPont’s “Sustainability” Commitments by the United Steelworkers (November 3, 2007)

Hold the Applause! A Case Study of Corporate Environmentalism as Practiced at Du Pont by Friends of the Earth (1991).